Small businesses say that they are beginning to feel as though the heavy hand of the recession is lifting and that they are tentatively investing in growth. However, there is a feeling of cautious optimism among small operators, with emphasis still being placed on cost control.

Barclays Local Business Survey, run this year in conjunction with The Times, has come to an end this week. More than 5,000 small business owners have taken part in the survey and an analysis of responses shows that there exists a general consensus that conditions are improving.

More than 60 per cent of respondents said that they were confident about the future of their business, and when asked how they feel compared with six months ago (or when they last took the survey), 42 per cent are feeling more upbeat. Six months ago 49 per cent hopedto grow their business in the next 12 months — this has increased to 53 per cent.

One respondent, Bernard Healy, the managing director of Scanplus, a printing company, commented: “I have decided to be positive and have increased our marketing spend by investing in website development amongst other things.”

Indeed, many respondents have been actively investing in their businesses to strengthen them, including increasing marketing spend, expanding product ranges and focusing on improving customer service.

“I have focused on cost without damaging quality,” said another respondent. “I have worked with a smaller number of suppliers to build more loyalty, which, in turn, has reduced costs. Our business has had to double its marketing spend and not cut it and as a result our sales have increased in some areas and stayed the same in others, but not dropped,” he said. The survey showed a fall in the number who think they will have to downsize their businesses from 17 per cent six months ago to 10 per cent.

Although there is growing optimism, it is cautious optimism. Eighty per cent of respondents said that they have focused on tighter cost control as a way to strengthen their businesses.

“I don’t like debt, and won’t open accounts with unproven customers for that reason,” one respondent said.

When asked what the top tip existing business owners would give to start-ups, the majority of respondents said: “Be cautious, manage wisely.”

One respondent said that his aim was “to gain a larger customer base by my own efforts and word of mouth from happy customers, leading to slow but steady growth.”

There remain mixed feelings about accessing finance. One respondent in five thought that it would be easy to borrow money, based on personal experience, and the experiences of friends, but 75 per cent said that they thought it would be difficult, based primarily on their feelings about the prevailing economic climate.

The survey has ended. You can read the results of wave one and wave two at www.barclays.co.uk/haveyoursay. Wave two results will be up on November 7.

If you don’t schmooze you lose

Case study: Navigate Events

Schmoozing has become increasingly important to small businesses as the recession lingers, Barclays Local Business Survey has shown.

Respondents said that talking to other small business owners was an extremely important source of information — from being a great way to generate ideas and sharing best practice to being a source of potential new customers.

Will Bixby, director of Navigate Events, an events company for the shipping industry, regularly attends networking lunches. Trade exhibitions were also a good way to meet people. There is also a small group in the industry that he draws on, in particular when it comes to marketing tips.

“When you are a small business you can feel isolated. I have a few people who I regularly talk to on the phone and a networking lunch once a month, which is really valuable. When it comes down to it, you can’t beat face-to-face when it comes to networking.”

Deanne Gold, founder of IPoint Research, a market research business, launched a networking company a year ago. Key Connectors now has 70 companies that meet once a week in North London and Hertfordshire. One member, a healthcare franchise, has calculated that it has won £10,000 of new business since becoming a member, according to Ms Gold, who says “networking is 100 per cent the cheapest form of marketing”.

Barclays runs seminars for people interested in starting out and for those in business looking to grow or looking for new marketing ideas. These all have time built into the agenda for those attending to make the most of the valuable networking opportunity of meeting others at the seminar. Find out more:

barclays.co.uk/business

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